1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Prepared by Deborah Baker Texas Christian University 9 Developing and Managing Products

2 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Learning Objectives 1.Explain the importance of developing new products and describe the six categories of new products 2. Explain the steps in the new-product development process 3. Explain the diffusion process through which new products are adopted

3 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Learning Objectives (continued) 4. Explain the concept of product life cycles

4 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Categories of New Products New-To-The-World New Product Lines Product Line Additions Improvements/Revisions Repositioned Products Lower-Priced Products 1 On Line

5 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 New-Product Development Process New-Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization New Product 2

6 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Idea Generation Customers Employees Distributors Competitors R & D Consultants Creative Thinking Sources of New-Product Ideas On Line 2

7 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Business Analysis Considerations in Business Analysis Stage Demand Cost Sales Profitability 2

8 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9Development  Creation of prototype  Marketing strategy  Packaging, branding, labeling  Manufacturing feasibility  Final government approvals if needed 2

9 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Alternatives to Test Marketing Single-source research using supermarket scanner data Simulated (laboratory) market testing Online test marketing 2 On Line

10 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9Commercialization Production Inventory Buildup Distribution Shipments Sales Training Trade Announcements Customer Advertising Steps in Marketing a New Product Steps in Marketing a New Product 2

11 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Categories of Adopters Laggards Late Majority Early Majority Early Adopters Innovators 5

12 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Product Characteristics and the Rate of Adoption Trialability Observability Relative Advantage Compatibility Complexity On Line 5

13 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Product Life Cycle PLC Has Implications for Sales and Profits At Each Stage PLC Has Implications for Sales and Profits At Each Stage Introduction Growth Maturity Decline 6

14 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 9 Diffusion Process and PLC Curve Innovators Early adopters Early majority Late majority Laggards Product life cycle curve Diffusioncurve Introduction Growth Maturity Decline Sales 6